[Click eStock] “SMAC, Growth Continues with Expansion of New Customers”

IV Research analyzed on the 24th that Smac will continue to grow through the expansion of new customers.

Smac started in 1989 based on the machine tool division of Samsung Heavy Industries and is a company that manufactures machine tools, industrial robots, and more. It supplies products across all industries without being limited to a specific sector and exports to about 60 countries.

As of the cumulative third quarter of last year, the machine division accounted for about 96% of sales, making up the majority. The new growth engine business is led by the convergence business division, including smart factories, automated waste battery systems, industrial robots, and semiconductor inspection equipment.

Since turning profitable last year, cash flow is also expected to improve, lowering the possibility of additional fundraising. Conversion requests for the 7th series convertible bonds issued at 10 KRW in October 2021 have continued, with the current balance at about 6.7 billion KRW. The conversion price of 1,670 KRW is lower than the current price of 2,115 KRW, so the overhang burden still exists.

Last year's third-quarter performance recorded sales of 119.9 billion KRW and operating profit of 7 billion KRW. Since the first quarter of last year, operating profit turned positive, breaking away from the deficit structure that had continued since 2018. After the industrial restructuring following COVID-19 in 2020, the cutthroat competition ended.

At the same time, Smac continued to improve its structure by organizing low-profitability divisions for selection and concentration, thus securing the strength to maintain a profitable structure in the future.

Smac has been experiencing a full-fledged leverage effect since 2022 due to sales growth from discovering new markets. Despite worsening business conditions caused by the US-China trade dispute in 2018-2019 and COVID-19 in 2020, Smac has continuously discovered new customers through ongoing research and development investment and overseas sales expansion.

Accordingly, sales growth in major markets such as Europe and the United States has continued since 2021. In particular, the sales proportion to Europe has increased to about 30%, and the order backlog proportion to about 50%, solidifying its position in the European market.

The IV Research Center analyzed, “This year’s performance is expected to be sales of 180 billion KRW and operating profit of 15 billion KRW,” adding, “It is highly likely to be achieved due to completed restructuring, sales growth from increased exports, and stabilization of raw material prices.”